Thinking of trading in the share market and looking for specific requirements like is Demat account necessary for trading?
Now, to provide the answer for the same let’s first know what trading and Demat account is?
Trading in the share market simply means buying and selling stocks and on the other hand, a Demat account is a process to secure your shares in the dematerialized form.
So, if you want to trade in the share market, then YES Demat account is necessary.
But Wait!
Is a Demat account necessary for all kinds of trades?
As you might know, that in the share market either you can do intraday or delivery trading. Delivery trading as the name goes is the delivery of shares to the Demat account.
So here you need a Demat account.
But what about intraday trading? Is it necessary to have a Demat account for intraday trading?
Is Demat Account Necessary for Intraday Trading?
Intraday trading, the form of trade where you can buy or sell stocks within the same trading session, i.e., you buy stocks in the morning and square-off your position before the market closes.
Demat account is for holding shares and whenever you trade, the exchange takes T+2 days for trade settlement, i.e. if you buy shares on Monday then it gets credited to your account on Wednesday after 3:30 PM.
Now in intraday trading, since you are buying and selling shares within the same trading session, so here the above-mentioned rule is not applicable.
This fact clears that you do not require a Demat account for intraday trading.
However, most of the stockbrokers like Choice Broking provide you the benefit of a 2-in-1 account where the trader can activate both trading and Demat accounts at the same cost.
This opens the gateway for them to hold the securities for the long-term in any of the segments.
Conclusion
Opening a Demat account is mandatory to step your foot in the share market. But when it comes to doing intraday trading, then traders are held with a choice where they can choose to open both Demat or trading account or simply begin their journey with the trading account.
So, plan your trading journey in the stock market and open an account now.
In case of any query or doubt, feel free to reach us and we will assist you in opening a Demat account for FREE!
